Apple CEO Steve Jobs introduced a curved aluminum and glass nano -- the best-selling iPod -- for $149 with 8 gigabytes of storage, $50 less than the predecessor model, and a 16-gigabyte version for $199, with up to 24 hours of music playback or four hours of video. He also rolled out a thinner, $229 version of the Internet-connecting iPod touch with rounded edges and 8 gigabytes of storage.

SAN FRANCISCO
(Reuters) - A thin and smiling Apple Inc Chief Executive Steve Jobs
launched a much thinner, curved iPod nano music player and joked about
the state of his much-discussed health on Tuesday.

But shares of Apple fell more than 4 percent after the presentation,
which had no major surprises for investors. Apple last week invited
reporters to a music-related event, stoking expectations of new
players. Some had hoped for new computers as well as iPods, but that
did not happen.

Jobs introduced a curved aluminum and glass nano -- the best-selling
iPod -- for $149 with 8 gigabytes of storage, $50 less than the
predecessor model, and a 16-gigabyte version for $199, with up to 24
hours of music playback or four hours of video.

He also rolled out a thinner, $229 version of the Internet-connecting iPod touch with rounded edges and 8 gigabytes of storage.

Apple dominates personal digital music players, with nearly
three-quarters of the U.S. market in July, Jobs said, adding that the
product line-up was strong for gift-giving season.

"I would call it a series of both expected and unexpected
announcements. Clearly the new iPod nano in the flesh is certainly more
appealing than it's been. It was expected but I think it will sell well
in the holiday season," said Michael Abramsky, analyst with RBC Capital
Markets.

He added that Jobs did not look much different from June, when his
gaunt frame drew speculation of a recurrence of cancer or other
problems and unnerved investors who see him as crucial to the success
of the company.

DEATH REPORTS EXAGGERATED

Jobs appeared thin but jaunty as he walked around the stage in his
trademark outfit of jeans and long-sleeve black shirt in front of a
screen which flashed "The reports of my death are greatly exaggerated"
-- a quotation borrowed from Mark Twain.

In 2004, Jobs, 53, said he had undergone successful surgery to remove a rare type of pancreatic cancer.

Apple Marketing chief Philip Schiller said video games have emerged
as the first big category of applications on the iPhone and iPod Touch.
He said 700 of the roughly 3,000 applications sold on Apple's AppStore
were games, the largest software category.

"Apple tends not to think in terms of demographics," Schiller told
Reuters in an interview. But he added: "You are likely to see more
people using iPod nano than a Touch in athletics. If you are a kid who
plays lots of games, perhaps you would be more likely to own a Touch,"
he said.

Apple also said new nano has a "shake to shuffle" feature that
changes songs as the player itself is jiggled and that television
broadcaster NBC had rejoined online video and music store iTunes.

The stock had been off just over $40, or a little over 20 percent in
the year-to-date, but has weathered the sell-off in stocks tied to the
U.S. credit crunch far better than most other shares, including many
technology names.

(Reporting by David Lawsky and Eric Auchard, writing by Peter Henderson, editing by Maureen Bavdek and Derek Caney)